nifty 50 anaylsis
Nifty has given a breakout from the downwards trendline after taking support from the trendline joining covid lows and swing low of 15183. It has retested that trendline and took support at that trendline which was also the breakout of the ascending triangle at 17910-17940. It formed a good W pattern in 15 min in this area and moved up but the bullish view would have been supported had it closed above 18k which it did not.
Taking the Fib of the whole downmove we can see that NIfty faced resistance at the 50% retracement area of 18120 and has moved down again to the 38.2% area of 17930. It is imperative for NIfty to break back above 18100 to continue this upward momentum.
Similarly taking the Fib retracement area of the current upmove it indicates that 18830-18860 is an important support area . It did not quite test this area so any move lower should be met with a little apprehension as the trendline support would have moved lower as well and hence a break of the above 18830-18860 is essential for further down movement.
Bearish Signs: -
1. Nifty weekly could not close above 18k.
2. Call writers have been very active and FII options data (1.26L Calls vs 4.45L Puts open positions) is very very negative. In Futures FIIs are 80.7k short OI.
3. Both Bank Nifty and IT charts dont inspire confidence with BnF not able to close above 41700 which was the previous ATH that it had broken. Similarly IT also could not close above 31500 which was the previous swing high.
Bullish Signs: -
1. This move down could be possible retest of the downwards trendline or the breakout of the ascending triangle area.
2. W formation in 15min indicates support present at this particular area.
Possible trades: -
Gap Up/Flat :- In case of a slight gap up or flat and if Nifty moves higher, then 17980-18020 is the region to watch out for. If this gets taken out then we can see a bit of short covering and NIfty would again move towards 18130. There could be a possibility of Nifty forming a hammer in the 1st 15 min which can be taken as a positive sign. But if Nifty exhibits negative signs like a shooting star or M pattern at this area then it could signal bearish movement.
Gap down: - In case of a gap down, there is a possibility that NIfty could take support around 17860 as the trendline would have moved lower and this is also the 38.2% retracement area of current Fib movement. So have to wait for this swing to be broken to take a down trade with supports coming in at 17750 and 17650.
Taking the Fib of the whole downmove we can see that NIfty faced resistance at the 50% retracement area of 18120 and has moved down again to the 38.2% area of 17930. It is imperative for NIfty to break back above 18100 to continue this upward momentum.
Similarly taking the Fib retracement area of the current upmove it indicates that 18830-18860 is an important support area . It did not quite test this area so any move lower should be met with a little apprehension as the trendline support would have moved lower as well and hence a break of the above 18830-18860 is essential for further down movement.
Bearish Signs: -
1. Nifty weekly could not close above 18k.
2. Call writers have been very active and FII options data (1.26L Calls vs 4.45L Puts open positions) is very very negative. In Futures FIIs are 80.7k short OI.
3. Both Bank Nifty and IT charts dont inspire confidence with BnF not able to close above 41700 which was the previous ATH that it had broken. Similarly IT also could not close above 31500 which was the previous swing high.
Bullish Signs: -
1. This move down could be possible retest of the downwards trendline or the breakout of the ascending triangle area.
2. W formation in 15min indicates support present at this particular area.
Possible trades: -
Gap Up/Flat :- In case of a slight gap up or flat and if Nifty moves higher, then 17980-18020 is the region to watch out for. If this gets taken out then we can see a bit of short covering and NIfty would again move towards 18130. There could be a possibility of Nifty forming a hammer in the 1st 15 min which can be taken as a positive sign. But if Nifty exhibits negative signs like a shooting star or M pattern at this area then it could signal bearish movement.
Gap down: - In case of a gap down, there is a possibility that NIfty could take support around 17860 as the trendline would have moved lower and this is also the 38.2% retracement area of current Fib movement. So have to wait for this swing to be broken to take a down trade with supports coming in at 17750 and 17650.
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